Improving the energy efficiency of the nation’s homes and buildings can be best accomplished with incentives and education, according to the National Association of Realtors®.

In testimony today before the Housing and Community Opportunity Subcommittee of the House Financial Services Committee, NAR expressed support for the approach and overarching goals behind the Green Resources for Energy Efficient Neighborhoods (GREEN) Act, H.R. 2336.

“Realtors® build communities, and environmental issues related to housing and development affect our global community,” said Realtor® David Wluka, a member of NAR’s Global Climate Change Presidential Advisory Group who spoke on behalf of the association. “NAR is committed to efforts that advance consumer understanding of the need for energy efficiency and to reduce energy use. Toward that end, we support the proposed GREEN Act’s goals of encouraging energy efficiency and conservation in our nation’s housing stock.”

H.R. 2336 would establish incentives to encourage energy efficient building, rehabilitation and upgrades. In addition, the bill provides a loan fund for states to implement renewable energy projects and would encourage a number of U.S. Department of Housing and Urban Development demonstration and pilot programs that would provide best practices and great experiences for promoting energy efficiency in housing.

While NAR supports the broad goals of the proposed legislation, Realtors® are concerned about a small number of the bill’s provisions, although these are issues that easily could be addressed. However, Wluka expressed stronger concern about proposed provisions in a related bill, H.R. 2454, the American Clean Energy and Security Act, which would create a system of energy labels for homes and buildings across the country.

“Labeling every home in America will not improve building efficiency,” said Wluka. “During this time of economic crisis, many families and commercial property owners do not have the financial resources to make needed energy-related improvements. Adding to the cost of homeownership would compound the challenges many homeowners are already facing.”

“We know that many of today’s consumers want homes and communities that are sensitive to the larger environment, and we are pleased that the GREEN Act would offer resources and incentives to homeowners to help them improve the energy efficiency of their homes,” said Wluka. “The consumer education efforts funded by this legislation would also increase public awareness of the availability of energy efficient mortgages and encourage movement toward green housing.”

The following is a statement by National Association of Realtors® President Charles McMillan:

“NAR and our 1.2 million members applaud the Business Roundtable for its sound policy recommendations put forth to reinvigorate our nation’s housing market. The proposal they announced today is consistent with the recommendations NAR has advocated and reflects the critical need to continue efforts to bring stability to the housing market.

“As President Barack Obama, U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke have all noted, there can be no economic recovery without stabilization in the housing market. We believe NAR’s recommendations, along with those from other groups like BRT, are necessary and need to be implemented quickly.

“NAR has called on Congress and the Obama administration to expand the first-time home buyer tax credit to all home buyers, regardless of income. In addition, it is imperative to maintain mortgage interest rates below 5 percent, make the loan limit increases permanent, and strengthen foreclosure mitigation and loan modification efforts. These are all actions that BRT is fully supporting and we welcome their involvement.

“We look forward to working with the BRT and urge Congress and the administration to continue to put measures in place to reduce foreclosures and housing inventory, and stabilize home values.”

The U.S. Department of the Treasury (Treasury), Office of Inspector General, is investigating incidences whereby individuals are using fraudulent Treasury-related financial obligations or accounts to attempt purchases or pay debts.  Fraud perpetrators across the nation have recently begun to use fraudulent promissory notes and/or private bonds as vehicles to defraud investors out of hundreds of millions of dollars. 

The Department of the Treasury is also aware of several fraudulent schemes that involve what are claimed to be securities issued or backed by the Treasury Department or another part of the U.S. Government.  These scams have been directed towards banks, charities, individuals, and companies which seek payment on the fraudulent securities.  

Recently, Treasury OIG has become aware of a different variation of this scheme.  Individuals are obtaining routing numbers from two Treasury bureaus, the Financial Management Service (FMS) and the Bureau of the Public Debt (BPD).  Fraudulent seminars are being held throughout the United States, which teach attendees how to create the aforementioned fictitious documents and how to use federal routing numbers.  Individuals are now creating false checking accounts with the federal routing numbers, using their social security number as the checking account number, and listing the bank as either the FMS or the BPD.  Be advised that as Treasury bureaus and the Treasury Direct Program do NOT offer checking accounts for the public, they will NOT honor any of these checks.

Sample fraudulent documents, which falsely utilize names of Treasury bureaus and/or officials, are provided below for reference.  These documents are NOT valid negotiable financial instruments and recipients should NOT respond to, nor act upon, such documents.  In addition to browsing the documents below, you may visit the official website of the Bureau of the Public Debt for more information on this topic and how to avoid becoming a victim of this type of fraud.

A secondary mortgage market model that includes some level of government participation is necessary to ensure affordable and available home mortgages. That is the message the National Association of Realtors^® delivered during a House Financial Services Subcommittee hearing today.

“Fannie Mae and Freddie Mac serve an important role in expanding homeownership and providing a solid foundation for our nation’s housing financial system,” said Realtor^® Frances Martinez Myers, who spoke on behalf of NAR. “Unlike private secondary market investors, Fannie and Freddie remain active in housing markets during downturns, using their federal ties to facilitate mortgage finance and support homeownership opportunities for all qualified borrowers.”

By providing capital for mortgage finance during disruptive and down markets, these government-sponsored enterprises are vital to the success of the nation’s housing system. “As the market turmoil reached its peak in late 2008, it became apparent that the role of the GSEs, even in conservatorship, was of utmost importance to the viability of the housing market, as private mortgage capital effectively fled the marketplace,” Martinez Myers said.

Fannie Mae and Freddie Mac help ensure that home buyers have access to fair and affordable mortgages, which in turn stimulates real estate transactions and supports the larger economy. “If no government-backed entity had existed as private mortgage capital dried up, the housing market would have come to a complete halt and thrown our nation into a deeper recession, or even a depression,” said Martinez Myers.

A thriving U.S. housing market and economy will require a secondary mortgage market with safe, sound and dependable participants. NAR shared with Congress a set of principles for ensuring a robust financing environment for homeownership. These principles include facilitating the flow of capital into the mortgage market, in all conditions; requiring institutions to pass on the advantage of lower borrowing costs to qualified borrowers; mandating sound underwriting standards; and providing rigorous oversight to protect taxpayers.

“We believe that the principles we have set forth today will help Congress and our housing partners design a secondary mortgage model that will be in all of our best interests, now and in the future. We look forward to working with Congress and the Obama administration in ensuring a strong housing market and a full economic recovery,” Martinez Myers said.

Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to the National Association of Realtors^®.

The Pending homes sales index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it was 87.5.

NAR’s chief economist said buyers are responding to very favorable market conditions. “Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he said. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

The Pending Home Sales Index in the Northeast shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago. In the Midwest the index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. In the West the index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

NAR’s President, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said there are numerous buyer assistance programs around the country. “Some states are offering bridge loans that allow first-time buyers to use the tax credit for down-payment and closing costs, but there are many other local government and nonprofit programs available to buyers, depending on location,” he said.

“Just last week, HUD announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger down-payment. Buyers who are wondering about their options should contact a Realtor^®, who can advise consumers on the housing assistance programs and resources available in a given area.”

NAR’s Housing Affordability Index is in record territory. The affordability index rose to 174.8 in April from an upwardly revised 171.9 in March, and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.

A median-income family, earning $60,900, could afford a home costing $296,800 in April with a 20 percent down-payment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down-payments are roughly 80 percent of that amount. The affordable price was well above the median existing single-family home price in April, which was $169,800.